Retire Early
Lifestyle
Retirement; like your parents, but way cooler

In 1991 Billy and Akaisha Kaderli retired at the age
of 38. Now, into their 4th decade of this
financially independent lifestyle, they invite you
to take advantage of their wisdom and experience. |
|
How to
Start a Real Estate Business
Build Your Own Property
Empire
Eddie Segal
The world of real estate investing is certainly an exciting one, and it’s
easy to see why it attracts so many newcomers each year. However, it can be
a tough nut to crack as you’ll need to dedicate time to hunting down the
best properties, orchestrating extensive marketing campaigns, and juggle a
huge range of diverse clients.
Luckily, we’re on hand to help. We’ll walk you through the benefits of launching
your own real estate business and how to make a success of it at each step of
your journey.
Is A Real Estate Business Profitable?
The short answer? Most definitely. However, it requires hard work and dedication
as it’s estimated around three out of every four new real estate businesses fail
within the first five years. For those that stick with it, though, the rewards
can be impressive.
The potential market is huge.
According to the National Association of Realtors,
in 2020, there were 5.64 million sales of existing homes and 822,000 sales of
new homes across the US. Much of your profit will come from acquiring property
and realizing gains over time through appreciation.
To help shoulder the burden of the initial investment, and look after your
savings, you’ll probably want to launch your first venture with a
real estate business loan.
Top Benefits of Starting a Real Estate Business
Be your own boss -
One of the main reasons people get into real estate investing is the chance to
be their own boss. Success or failure is entirely on your shoulders, but you get
to make all the decisions yourself and set your own agenda with total
flexibility
Low barriers to entry -
You don’t need a university degree to get started in real estate investing and
anyone can give it a try. That’s not to say it won’t be hard work, and the
competition isn’t fierce, but learning the ropes is straightforward as long as
you dedicate the time and effort
Financial security -
Holding on to multiple appreciating properties means your financial future is
secured. You can either realize profits over time as the value rises, by
renovating properties, or through a steady income stream from renters. Each
offers a stable form of income and, as long as you’ve done your research and
purchased in the right areas, you can secure a nice nest egg for retirement
Hedge against inflation -
Each year the purchasing power of the dollar decreases due to inflation. As most
people’s wages remain fairly static, a real estate business represents a golden
opportunity to hedge against inflation with many property values rising at a
higher rate.
Steps to Starting a Real Estate Business
Step One - Set Your Objective
Before you get too excited and start putting offers in on properties, ask
yourself what your goals are. Do you want multiple properties to build a rental
income, and are you equipped to handle tenant management? Or do you have the
skills and contacts to build a renovation business?
Setting a clear goal right at the outset of your business will determine how
successful you’ll be and give you some solid benchmarks to work against. Make
sure you plan for the long term and set key performance indicators for the next
five, ten, and 15 years.
Get everything written down in a detailed business plan. This will not only help
give you direction, but it’ll also be a key document when securing financing.
Step Two - Do Extensive Research
Now that you have a clear goal, you need to see if it’s viable in your area.
Research your local market extensively. What sort of properties are selling and
where? For example, is the downtown area crying out for rental properties, or is
the market saturated?
Check out the competition too. Find out how profitable sales are in different
regions and areas and what sort of business models work well. You might find
that you need to go back to the drawing board to reset your objectives, or even
need to expand your business further afield.
Thorough research will ensure you’re not fumbling around buying any old property
and is key in ensuring your business is profitable. Plus, it helps identify your
strengths and weaknesses early on, letting you know where you need to improve.
Organizing this information into a
SWOT analysis
PowerPoint presentation can provide clarity and structure to your findings.
Step Three - Form a Real Estate LLC
Before you start buying and selling we’d highly recommend establishing your
business as a real estate LLC. An LLC is a limited liability company and is the
best way to protect yourself from the risks associated with property investing.
It means you’ll be conducting all sales and purchases under the name of your
business and you yourself won’t be personally liable for any losses, keeping
your own finances safe. You can even set up an LLC for each property you own to
spread the risk even further.
However, bear in mind there are cost implications and various regulations to
consider when setting up an LLC and this will vary across each state.
Step Four - Set up Your Website and Define Your Brand
The overwhelming majority of property searches, inquiries, and purchases
originate online, so you’re going to need a professional website before you
start. In fact, there are a number of DIY web-builders on the market now that
have ready-to-go real estate business templates. They’re easy to use and you
could have a decent website set up within a few hours.
Alternatively, you might want to engage the services of a professional web
developer to really tailor your look. Either way, this is the perfect time to
define your brand and establish yourself as the go-to expert in your chosen real
estate niche.
Choosing a memorable and
relevant domain name is crucial for your online retail business, as it serves as
the digital identity that customers will associate with your brand.
Step Five - Arrange Funding
By this stage, you’ve done your research, lined up some potential properties,
set yourself up as a legal business, and have a website up and running. Now it’s
time to arrange funding and start making some purchases.
There are hundreds of options available for commercial real estate loans these
days and a lot of flexible ways to secure funding. Typically, lenders will be
willing to offer up to 80% of the value of any property you purchase and
interest rates are usually quite reasonable.
If you have a good credit score, strong personal financial history, and no
existing debt, it’s more than likely you’ll be offered lower rates. You could
try traditional banks, alternative online lenders, and even federal funding to
secure your first investments.
Step Six - Launch a Marketing Campaign
Getting your brand out there is going to be critical to your success. You should
focus your efforts on finding clients in your local area and apply
local SEO to ensure you rank high in Google searches.
You might want to consider setting some of your budget aside to secure Google or
Facebook ads too. These can be incredibly effective at bringing in customers,
especially in the early days of a real estate business.
Never underestimate local networking, either. Get to as many events as you can
as personal relationships and referrals could be the backbone to your success.
You might want to start with your local chamber of commerce or see what kind of
business events are on in your area.
Stay active on social media, get involved in conversations on LinkedIn and post
high-quality, enticing images of your properties on Instagram to build
engagement.
Step Seven - Keep up to Date on Your Leads
One constant you’ll find in any business is that you’ll be chasing up leads and
sales. This is even more true in the world of real estate and you’re going to be
spending a lot of time emailing and calling potential clients.
You’ll need to keep a detailed database of current and potential clients, track
when you last contacted them, gauge their interest, and ensure you’re offering
something of value that’s specific to them. Plus, you’ll need to juggle all of
this whilst trying to generate brand new leads at the same time.
Step Eight - Regularly Check Your Progress
Make sure to keep an eye on how you’re tracking the goals in your business plan.
Monthly pit stops are a great way to measure your success and spot any issues
before they become major risks.
It helps you see what you’re doing right, and where you might be going wrong.
Think of your business plan as a living document that needs to adapt and change
as you encounter new circumstances.
Conclusion
Launching a new real estate business can be one of the most profitable and
rewarding things you can do. As you can see, though, you’re going to need to put
the effort in to make a success of it. You need to do a lot of research, put in
a huge amount of groundwork, and be prepared to deal with the changes that can
come in a fast-paced industry.
That being said, it shouldn’t take long for determined entrepreneurs to pick up
the basics, learn from their mistakes, and apply their learning to a highly
successful venture.
For more on
Retirement Topics,
click here and
here and don't forget to signup for
our free Newsletter.


About the Authors



Retire
Early Lifestyle appeals to a different
kind of person – the person who prizes their
independence, values their time, and who doesn’t
want to mindlessly follow the crowd.
HOME
Book Store
Retire Early Lifestyle Blog
About Billy & Akaisha
Kaderli
Press
Contact
20 Questions
Preferred
Links
Retirement
Country Info
Retiree
Interviews
Commentary
REL
Videos
|